Visa snaps up SA mobile financial services company Fundamo for $110m

Visa, the world’s largest credit and debit card network, has snapped up South African mobile financial services company Fundamo for $110-million in cash.

The Cape Town-based Fundamo is a privately-held company which has more than 50 active mobile financial services deployments across 40 countries, including 27 countries in Africa, Asia and the Middle East.

The company has been operating since 1999 and has a number of funders which include Cape Town venture capitalists and emerging market investment group PoweredByVC, investment company Remgro and financial services corporate Sanlam. PoweredByVC is also linked to dot.com billionaire Mark Shuttleworth.

Fundamo’s deployments currently have a base of more than five million registered subscribers, but Visa believes there is “potential to reach more than 180-million consumers”. Mobile prepaid payments provide affordable transaction capabilities to merchants and consumers in emerging market regions.

Visa says the investment will “accelerate the execution of Visa’s global strategy… to provide the next generation of payments solutions, enabling consumers to transact wherever and whenever they choose…”

“Mobile network operators and financial institutions will now be able to take advantage of Fundamo’s trusted mobile financial services platform backed by Visa’s high standards for security, reliability and scale,” says Hannes van Rensburg, CEO of Fundamo.

Hannes van Rensburg and the Fundamo management team will continue to manage current and future Fundamo implementations as valuable members of Visa’s mobile product organisation.

In a related deal, Visa announced it would also acquire Monitise plc, a UK-based mobile banking network which provides mobile financial services to more developed world economies.

“The combination of acquiring Fundamo and expanding the relationship with Monitise will enable Visa to deliver best-in-class mobile financial services and payments capabilities to consumers across the full spectrum of uses, geographies and mobile environments from basic services on simple handsets to more advanced services for smart phone owners,” said Visa in a statement.

The mobile wallet
Fundamo’s main product is its “mobile wallet” — a complete ‘standalone’ banking solution with a functional and secure account which customers can use to make convenient and secure payments, amongst other things, from their mobile phone. The account is managed and maintained on the mobile phone as well as through the use of the internet or a branded payment card.

Fundamo says its wallet “delivers the fully integrated solution; the consumer friendly interface on the handset, the robust transaction and security engine for secure, efficient processing, and the fully functional value store (transactional account) with all the robust administrative functions and processes required to manage the back office.”

“It will expand the utility of closed-loop systems, enable them to be interoperable, make financial services available to more consumers and offer merchants access to new customers. This has the potential to connect billions of unbanked and under-banked consumers to each other and to the global economy,” Visa said in a statement.

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Nur is an enigma with a passion for creating words. He recently entered a love affair with technology and chorizo sausages. He travels a lot -- you catch him, if you can, at a Silicon Cape event every now and again. More